US retail surprises in July
Consumers seem in much better shape than previous data indicated
Retail sales rose 0.6% in July (4.2% YOY), and June retail sales were revised to a 0.3% gain from a previously-reported -0.2% decline.
Every category of sales, including auto dealers, department stores, and online sales showed strong gains, except for clothing stores, electronics stores and gas stations (the last due to lower prices). Auto sales were up 1.2% after a revised 0.9% rise in June.
That’s a very different picture from the bleak view of the US consumer painted by many analysts during the past several weeks. Rising auto loan defaults, credit card delinquencies, and slower growth in overall consumer credit suggested that US households were financially stretched, as employment gains bunched up at the bottom of the pay spectrum and average hourly earnings languished.